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Gaw Capital poised to buy PoMo in Selegie

Gaw Capital poised to buy PoMo in Selegie

HK-based group in exclusive due diligence; price expected to be around S$350m for office and retail asset

Sep 19, 2017

Kalpana Rashiwala

POMO, a nine-storey office and retail development in Selegie Road, is under exclusive due diligence for a transaction at around S$350 million. The potential buyer that is doing the due diligence is Hong Kong-based private equity real estate group Gaw Capital Partners, BT understands.

The transaction is being negotiated as a sale of shares in a 51:49 joint-venture company of Enviro-Hub Holdings Ltd and BS Capital that owns the asset.

BS Capital is owned by Raymond Ng Ah Hua, a controlling shareholder and the executive chairman of Enviro-Hub Holdings.

Located near Dhoby Ghaut and Bencoolen MRT stations, PoMo is on a site with a land area of 43,027 sq ft and a balance lease term of 64.5 years(See amendment note). Under the Urban Redevelopment Authority's Master Plan 2014, the site is zoned for commercial use.

The development has a gross floor area of almost 235,000 sq ft.

The price at which PoMo's sale is being negotiated reflects sub-4 per cent net yield based on the building's existing leases and occupancy rate.

PoMo has a net lettable area of about 180,000 sq ft comprising 110,000 sq ft of offices (from levels four to nine) and 70,000 sq ft of retail space (from basement one to level three).

The offices are fully leased, with education services provider Kaplan the biggest tenant.Almost the whole of level five is designated for the Community Sports Facilities Scheme and this space is occupied by The Little Arts Academy.

The retail space is understood to be around 85 per cent leased, achieving an average rent of about S$10 psf a month. Tenants include Evolve Mixed Martial Arts, Cosmoprof Academy, MOS Burger, Ya Kun Kaya Toast and other F&B outlets. PoMo has 143 carpark lots.

Based on earlier reports, the building underwent a refurbishment programme costing close to S$10 million in 2013, which was completed by its then owner, CLSA Capital Partners as part of its S$336 million sale of the property in the same year to Enviro-Hub and BS Capital.

CLSA in turn had acquired the property, formerly known as Paradiz Centre, for S$255 million in 2011 from Lendlease and Silverpeak Real Estate Partners.

For the ongoing sale by Enviro-Hub and BS Capital, the property was marketed through an expression of interest exercise conducted by CBRE and Colliers International that closed in late July. That exercise is said to have garnered more than half a dozen bids, with Gaw Capital offering the best terms.

In 2015, Gaw Capital bought Big Hotel in Middle Road for S$203 million which it has since refurbished and rebranded to Hotel G Singapore.

Since its inception in 2005 by brothers Goodwin and Kenneth Gaw in 2005, the group has raised equity of US$8.6 billion and has US$12.8 billion assets under management as at the first quarter of 2017, based on information on its website.